It was nearly seven weeks ago when Gary Crosby suddenly found himself thrust into the limelight, with big expectations.

The business veteran who has spent his career in senior operating and financial roles behind the scenes was named interim president and CEO of First Niagara Financial Group, following the abrupt departure of John R. Koelmel.

Koelmel had led the Buffalo-based bank’s rapid growth, but lost support from investors and the board of directors because the stock price hadn’t kept up. The board wanted someone new to operate the bank, not acquire more.

A national search is under way for a successor, but in the meantime, Crosby – who was chief operating and financial officer for the Buffalo Public School District for five years – is in charge. And he’s been told to treat the job as if it’s permanent.

Q: Now that you’re CEO, what are your plans?

A: My goals revolve around people and operating results. And I told them it’s in that order, because if we don’t have the right people in the right places and we don’t have people feeling comfortable, you can’t get the operating results.

I’m happy to say that after a significant change in leadership, the entire organization has really settled down very nicely and all of our people are focused on what needs to be done.

What needs to be done is pretty simple, too. We just have to focus on being more efficient.

You’ve got to get to a point where you’re not growing so rapidly, particularly by acquisition, because unless you’ve done one, it’s hard to appreciate just how much bandwidth in the organization an acquisition consumes. Even after you’ve done the acquisition, then there’s the integration process.

So it’s very important we know that we’re out of the acquisition business and we’re just strictly focused on operating and identifying those growing pains, most of which have been identified, and staying focused, making decisions on how to treat those growing pains, making sure we execute on those decisions, and holding people accountable for those results.

Q: What growing pains?

A: If you compare us to the industry, we have a heck of a lot more sitting in securities than our peers. That really is a consequence of the acquisitions we’ve done, where we mainly received a lot of deposit money and cash, and not as much in loans.

We need to work very hard, and we are, at taking that investment securities portfolio and using the proceeds from that to fund loan growth, because by reducing our securities portfolio and getting our loan portfolio up, it instantly improves profitability, because we have much better return on loans than on our securities portfolio. That, unfortunately, is something that’s going to take a number of years.

Here’s another example of growing pains. We’ve done a lot of rip-and-replace over the last year in particular, where we’ve outgrown some of our platforms, our lending platforms for example. They don’t have all of the features and functionality, some of which went back to the thrift days, to handle all the volume, that customers of a top 25 bank would look for.

Q: What kinds of steps are you planning to cut expenses, as Wall Street seems to want?

A: I don’t see us as inefficient. I think the issue is how are we going to become more efficient.

They’re looking for us to be more forthcoming in terms of what are your strategies. So what they’re saying is give us more of a road map. And we’ve done that, but they want more.

Q: Will this mean closing branches and laying off staff?

A: Layoffs are not in the plan, but we will become more efficient. As we were growing quickly, we didn’t have enough time to say, ‘OK, let’s stop what we’re doing now and figure out the best way to fix this problem.’ What we did is threw people at problems. That’s when we started to get a little inefficient.

We’ll redeploy those people, because we’re still growing. Our volumes just keep getting bigger and bigger every year. So our throughput, our production, continues going up and continues to require people.

So in a perfect world, we start this year at 6,000 people, and in a perfect world, we end up at 6,000. It’s not a case where we’re ultimately going to get down to 5,000 people.

We’ve invested a lot of money in those people, so we don’t want to lose people. To the extent we do lose them through attrition, then we deal with it and take advantage of that situation.

Q: How was the reaction to John Koelmel’s departure?

A: We prepared for the worst. Let’s face it. John – he was First Niagara here for a long time. He’s a force of nature. He was really loved by the 6,000 people. You just have to see him go into a room. That whole room lights up. People really, really look to his leadership. So there was naturally a concern about how this team would respond to this rather abrupt departure.

So we prepared for that, and what I can tell you is that everybody settled down very quickly. Very, very sad, very disappointed that John was no longer leading the charge, but they settled down very, very quickly, and are back to business, and I was very, very pleased with that. It exceeded my expectations in terms of how quickly we stabilized. We’re talking about a very short period of time, a couple of days, where people were done talking about it and focused back on business.

Q: You’ve talked about being done acquiring. Does that mean if the dream deal came along, you wouldn’t even look at it?

A: That’s correct.

Q: You’ve had a varied career up to this point, including five years at the schools. What do you bring to the job?

A: It was supposed to be two (years), it ended up being five. (Laughter) When I told them I’d do it for two years, I was thinking of private sector years, and how much you can get done in two years. I wasn’t thinking in terms of dog years. That’s how it is in the public sector. As soon as you’ve got a good idea, there’s half a dozen people lining up to get in your way because they’re worried about how it affects their career. Holy mackerel.

The school district was just community service for me. Prior to that, my experience was financial and operational, and a very nice combination of both.

Q: And you’re still happy going back to your previous role?

A: After a month, I’m kind of enjoying this. It’s actually pretty easy, because people like Greg (Norwood, CFO) and others do all the hard and heavy lifting.

But yes, I would be very happy to go back to doing what I was doing, and I think if I did go back, assuming the new CEO would have me back, I’d go back in a much better position to carry out that function, having had the benefit of the interim leadership.

I have not thrown my hat in the ring, and I don’t intend to.

Q: How has Wall Street reacted to an unknown like you?

A: I think so far, so good. Looking at the analyst reports, I’ve even shown up as a candidate in some of the reports for the permanent role. So given that I came out of obscurity, and because frankly I prefer to be behind the curtain, I prefer to toil in anonymity, I’m more comfortable there, I think the reception so far has been good.

I’m only a month into the job, and we had a 52-week high.